By Constantinos Massonos, Contributor
The end of any playing career is a bittersweet, overwhelming moment, as athletes have to give up the life they enjoyed for years: training schedules, travels and competing in front of big crowds. The idea of letting all of these go and adjusting to a new lifestyle can be daunting and stressful and being emotionally and financially prepared is essential for a successful transition to life after sports.
As sporting success is based on careful planning and significant preparation, athletes can utilize these skills to help themselves secure a comfortable life after retirement. Ideally, preparation should start as soon as athletes gain their professional status. Athletes can seek help from local and international sports stakeholders such as athletes’ unions, sports clubs federations that offer various programs and initiatives supporting these efforts and of course professionals related to financial planning and career development.
Getting mentally ready for retirement might require expert help. On the other hand, getting financially ready can start by taking just a few crucial points into consideration, given that financial sustainability can prove to be a key success factor for mental readiness and ease:
Build a good team of advisors
Your team of advisors should be in place even before you sign your first professional contract, to be able to help you. As you would hire the best coaches, physios and doctors, you should do the same with your team of financial advisors based on their knowledge and qualifications. Your trusted team of professionals can help you set up a budget, manage taxes, guide your through saving and investment options and eventually help you prepare for retirement.
Start putting away as much money as possible starting with your first cheque
Athletes are faced with the challenge of retiring from sports 20 to 30 years earlier than most people, given that their career has a much shorter span than normal. As a result, their saving strategy should reflect that by saving a higher percentage of their income early on in their careers.
Saving should be a priority as nobody will care more about an athlete’s money than they do, so as soon as they have income coming in, they should put a portion of it away in their savings. The sooner they start saving, the more time their money has to grow.
Your goals should reflect the lifestyle you want to follow
Athletes should set financial goals and work towards them just as they do in their sport. They first need to identify their goals and priorities, according to the lifestyle they want to follow, and then devise an approach that will help them achieve those goals.
Having a financial plan in place can also help athletes cope with the extreme scenarios of an athlete’s life; they will know that even if they are forced to retire earlier than planned, they will be prepared. At the same time, athletes should be very careful to avoid the sudden wealth phenomenon and adjust the balance between “needs” and “wants”, so as to reflect their determination to ensure long term financial sustainability.
Financial literacy is vital
If you can’t explain something, you shouldn’t own it, so being able to understand basic financial concepts is really important for athletes to really take the reins of their financial life. Being the boss of something you don’t really understand, by delegating too much and overseeing too little, can lead to trouble.
Preparing and planning for retirement should always be based on what makes you happy and should align with your life dreams and goals. For help and advice on getting emotionally and financially ready for retirement you can get in touch with us at firstname.lastname@example.org.